Brazil's Conab reduces 2025/26 Sugar Production Forecast

Conab, Brazil's national agricultural agency, cut its forecast of sugar production for the 2025/26 year to 44.5 million tons on Tuesday. The reason given was bad weather conditions that affected sugarcane cultivation.

This revision represents a 3,1% reduction in Conab’s April estimate.

Conab announced that the sugar production in the center-south region, which is the main area for the industry, will now be forecast at 40,6 million tons. This is down 2,8% from April's forecast of 41,8 million tons.

Conab said that despite the lower projections, sugar production in Brazil, the world's largest producer and exporter, is still expected by Conab to rise 0.8% over the previous season.

Conab reported that producers are prioritizing the production of sugar over ethanol and this is fueling an increase in sugar, even though the sugarcane harvest for the country is expected to drop 1.2%, to 668.8 millions tons.

Conab reported that "unfavorable conditions" during the regrowth and development of crops in 2024, such as wildfires and irregular rainfall, and excessive heat contributed to the decline, especially in the middle-south.

Conab reported that the average productivity has fallen by 2.1% and is now at 75.6 tons/hectare. The industry's key indicator, total recoverable sugar (which measures how much sugar can be recovered), also fell 2.8%.

Conab stated that even with a smaller harvest of cane this year, sugar production could be the second highest on record, if projections are accurate.

Conab stated that the total ethanol production from corn and sugarcane is expected to drop 3.9% in 2025/26.

Conab reported that the decline was primarily due to a drop of 8.8% in sugarcane-based ethanol. However, this will be partly offset by an increase of 14.5% in corn-based bioethanol which is expected to reach a record 8,98 billion liters.

(source: Reuters)